BILL ANALYSIS {u SB 1245 u} Page 1 Date of Hearing: June 29, 1999 ASSEMBLY COMMITTEE ON JUDICIARY Sheila James Kuehl, Chair SB 1245 (Hayden) - As Amended: May 20, 1999 {u SUBJECT u} : COMPENSATION FOR WORLD WAR II SLAVE AND FORCED LABOR VICTIMS {u KEY ISSUE u} : SHOULD THE STATUTE OF LIMITATIONS BE EXTENDED UNTIL DECEMBER 31, 2010, TO ALLOW WORLD WAR II VICTIMS OF SLAVE OR FORCED LABOR TO BRING AN ACTION TO RECOVER COMPENSATION FOR UNPAID LABOR PERFORMED BETWEEN 1929 AND 1945? {u SUMMARY u} : Provides that any slave or forced labor victim of the Second World War, or heir of the victim, may bring an action to recover compensation for labor performed without pay between 1929 and 1945 against any entity or successor in interest thereof, for whom that labor was performed, and extends the statute of limitations for these actions until December 31, 2010. Specifically, {u this bill u} : 1)Provides that any slave or forced labor victim of the Second World War, or heir of the victim, may bring an action to recover compensation for labor performed without pay between 1929 and 1945 against any entity or successor in interest thereof, for whom that labor was performed, either directly or through a subsidiary or an affiliate. It also extends the statute of limitations for such actions until December 31, 2010, and expresses the Legislature's intent to apply the extension of the statute of limitations retroactively. 2)Defines "compensation" as the present value of wages and benefits that individuals should have been paid and damages for injuries sustained in connection with labor performed. Present value shall be calculated on the basis of the market value of the services at the time they were performed plus interest from the time the services were performed compounded annually to the date of full payment without diminution for wartime or postwar currency devaluation. 3)Provides that an action for compensation by a slave or forced labor victim may be brought in a superior court of this state, and that the court shall have jurisdiction over that action {u SB 1245 u} Page 2 until its completion or resolution. 4)Requires the Treasurer, the Public Employees' Retirement System, and the State Teacher's Retirement System to monitor and report to the Legislature on investments of the state and its pension funds in companies doing business in California, and affiliates of those companies, that owe compensation to victims of slave and forced labor from 1929 to 1945. 5)States the intent of the Legislature to enact additional public policy in any other case of proven patterns of slave labor employed by firms presently doing business in California that served as the basis of ill-gotten wealth at the expense of victims who are residents of California. {u EXISTING LAW u} : 1)Prohibits any business from engaging in unfair, dishonest, deceptive, destructive, fraudulent and discriminatory practices by which fair and honest competition is destroyed or prevented. (Business and Professions Code section 17200.) 2)Provides that there is a two-year statute of limitations for actions based on a contract, obligation or liability not founded upon an instrument of writing. It also provides for a one-year statute of limitations for an action of assault, battery, false imprisonment, or for injury to or for the death of one caused by the wrongful act or neglect of another. (Code of Civil Procedure sections 339 and 340.) 3)Provides that jurisdiction may be exercised by the court on any basis not inconsistent with the Constitution of this state or of the United States. (Code of Civil Procedure section 410.10.) {u FISCAL EFFECT u} : Unknown {u COMMENTS u} : According to the author, "thousands of elderly California residents are survivors of slave labor exploitation carried out by the Nazis during the Holocaust, living victims of the 'real profiteers' of Hitler's Third Reich. These slave laborers and their heirs are entitled to seek just compensation from their oppressors." SB 1245 would allow for victims to attempt to seek such compensation. {u SB 1245 u} Page 3 This bill would extend the statute of limitations until December 31, 2010, so that World War II victims of slave or forced labor, or their heirs, may bring actions to recover compensation for labor performed and damages incurred between 1929 and 1945. The bill would revive these causes of action that otherwise would have been time-barred. On the issue of the statute of limitations, the United States Supreme Court has long held that "if the lapse of time merely bars a personal claim for money or damages, there is no denial of due process in disappointing the hope of a complete defense. ? Statutes of limitation find their justification in necessity and convenience rather than in logic. They represent expedients, rather than principles. ? They are by definition arbitrary, and their operation does not discriminate against the just and the unjust claim, or the voidable or avoidable delay. ? Their shelter has never been regarded as what now is called a 'fundamental right'?the history of pleas of limitation shows them to be good only by legislative grace and to be subject to a relatively large degree of legislative control. ( {u Chase Securities Corp. v. Donaldson u} (1945) 325 U.S. 304.) Subsequently, in {u Liebig v. Superior Court u} (1989) 209 Cal.App.3d 828 and {uLent v. Doe u} (1995) 40 Cal.App.4th 1177, the California Courts of Appeal cited {u Chase Securities u} and affirmed the Legislature's power to revive civil common-law causes of action, even if the action was otherwise barred by the running of a statute of limitations. In both cases, the courts upheld against constitutional attack the retroactive application of Code of Civil Procedure section 340.1, relating to actions for child sexual abuse, to revive actions that had lapsed or had technically expired under prior law. It should be noted that the revival of actions for compensation for unpaid labor by Holocaust victims and heirs assures only that a claim would be heard on its merits. Other applicable defenses would not be affected. {u ARGUMENTS IN SUPPORT u} : The Southern California Council for Soviet Jews supports this bill on the basis that slave and forced labor victims should be given the chance to be compensated for their labor. According to the Council, "most of the German enterprises that supplied the Nazi war effort are in business today. The profits they made during the war were paid for not only by the blood of Allied soldiers, but also by the {u SB 1245 u} Page 4 lives and the labor of those who toiled, without compensation, as slaves to enrich the corporations that today lay claim to respectability within the world's business community. It is only that a fair and reasonable compensation be paid to those slaves who were forced to work for these greedy slave owners during the horrible days of World War II." The Skirball Cultural Center strongly supports the reasoning for this bill: "The German government and the international community are just beginning to address this issue. It is critical for California to lead the way. The German government has rejected claims for back wages from slave laborers, agreeing that the companies involved were responsible, not the German government. It is only fair and reasonable that compensation be paid those slave laborers forced to work during the Nazi Holocaust. The survivors are already in their 60s, 70s and 80s. This is an urgent matter that deserves immediate and just restitution before it is too late." The Auschwitz Study Foundation, Inc. supports this bill because "it is crucial that victims have legal standing in order to hold companies accountable for exploiting workers in the 'destruction through work' program." David Tokofsky, on behalf of the City of Los Angeles Board of Education, supports the bill's premise to compensate World War II slave and forced labor victims, since "many within the Nazi industrial complex benefited from the slave labor of hundreds of thousands of Jews and others who toiled under inhuman conditions. The majority of those enslaved, died from these horrible conditions. Since the conclusion of the war, few of the companies who benefited from slave labor have taken responsibility for their actions." The California State Teachers' Retirement System states that "SB 1245 requires the Teachers' Retirement Board, the CalPERS Board of Administration, and the State Treasurer to monitor and report to the Legislature investments in businesses that owe compensation to victims of slave labor from 1929 to 1945. In its current form, SB 1245 would not limit the Board's investment authority, or impose any significant administrative burden on the System. In addition, monitoring the investments described in the bill would facilitate the Board's existing policy to support efforts to reduce 'social injury' caused by corporations in which the System invests." {u SB 1245 u} Page 5 {u ARGUMENTS IN OPPOSITION u} : The California Manufacturers Association believes that while "the overall objective of the bill is commendable?the bill sets an unfortunate precedent by changing the law regarding the process to revive time-barred lawsuits?[and the organization is] concerned about whether California State Courts are the correct jurisdiction for these claims." {u PRIOR RELATED LEGISLATION u} : AB 1334 (Knox) Ch. 43, Stats. of 1998. {u REGISTERED SUPPORT / OPPOSITION u} : {u Support u} Association of Holocaust Survivors from former USSR Auschwitz Study Foundation, Inc. B'Nai Tikvah Congregation Board of Education, City of Los Angeles California State Teachers' Retirement System City of Los Angeles Governmental Advocates, Inc. Rabbi Harvey J. Fields, Ph.D. Hebrew Union College-Jewish Institute of Religion The Jewish Federation Jewish Public Affairs Committee of California Los Angeles City Council National Council of Jewish Women Skirball Cultural Center Southern California Council for Soviet Jews Supervisor Michael D. Antonovich, Board of Supervisors, County of Los Angeles Survivors of the Shoah Barbra Streisand U.S. Congressman Howard L. Berman U.S. Congressman Brad Sherman U.S. Congressman Henry A. Waxman University of Judaism Valley Beth Shalom Two individuals {u Opposition u} California Manufacturers Association {u SB 1245 u} Page 6 {u Analysis Prepared by u} : Sabina Jacobs / JUD. / (916) 319-2334